Uneasy Lies Sovereign Debt

Concerns about government debt rise in Japan and the U.S.

"IT'S GOOD TO BE KING," Mel Brooks would observe on more than one occasion in his role of Louis XVIII in his comedy, History of the World: Part I. While it wasn't the reason to which he referred, historically it's been good to be the sovereign because he could borrow lots of money. That came in handy, particularly when the king would go to war and need dough to raise an army.

More often than not, however, the sovereign would stiff his lenders, either defaulting outright or paying back the debt with clipped...